FDIC Closes Another Bank, Announces Asset Sale for Others

The ongoing credit crunch resulted in the closure of First Priority Bank of Bradenton, Fla., on Friday, the eighth bank closed by the Federal Deposit Insurance Corp. (FDIC) this year. SunTrust Banks (NYSE: STI) assumed the $225 million in insured deposits of First Priority, with the bank’s six locations reopening today as SunTrust branches.

As of June 30 2008, First Priority had total assets of $259 million and total deposits of $227 million. At the time of closing, there were approximately $13 million in uninsured deposits held in approximately 840 accounts that potentially exceeded federally-guaranteed insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers, according to the regulator.

The FDIC added that the cost of the failure to the FDIC insurance fund will be about $72 million. First Priority was the first bank to fail in Florida since Guaranty National Bank in 2004. This year, a total of eight FDIC-insured institutions have been closed.

“This announcement underscores that despite the challenges facing all banks today, the current environment also presents opportunities for strong institutions like SunTrust to expand our client base,” said James M. Wells III, SunTrust chairman, president and CEO, in a prepared statement.

In a related move, the FDIC is attempting to sell off some of the loans it has acquired during other bank failures. First Financial Network, Inc. of Oklahoma City announced today a $145 million loan portfolio offering which is being marketed on behalf of the regulator. The portfolio includes loans from the recently failed ANB Bank, Bentonville, Ark., for which FDIC is acting as receiver.

First Financial Network said it would market and manage all facets of the sale of performing and non-performing loans collateralized by properties located predominantly in Arkansas. The portfolio is comprised of 2,384 commercial real estate, commercial and industrial, residential, and consumer loans which have been stratified into pools based on loan type, performance, collateral and geographic location. Bid packages were to be made available today to qualified investors on First Financial Network’s Web site.